Exhibit 2.3
Conditional Delivery Agreement dated effective as of May 1, 1998, by
and among UCI Medical Affiliates, Inc.; UCI Medical Affiliates of
Georgia, Inc.; and MainStreet Healthcare Corporation.
CONDITIONAL DELIVERY AGREEMENT
This Conditional Delivery Agreement ("Agreement") is made to be effective
as of 12:01 a.m. on the 1st day of May, 1998, by, between and among UCI Medical
Affiliates, Inc., a Delaware corporation ("UCI"); UCI Medical Affiliates of
Georgia, Inc., a South Carolina corporation ("UCI of GA"); and MainStreet
Healthcare Corporation, a Delaware corporation ("MainStreet").
INTRODUCTION.
In connection with the closing on the date hereof of the transfer of
substantially all of the assets of MainStreet to UCI of GA (the "Closing") as
contemplated by that certain Acquisition Agreement and Plan of Reorganization
dated February 9, 1998, by and among UCI; UCI of GA; MainStreet; MainStreet
Healthcare Medical Group, P.C., a Georgia professional corporation; MainStreet
Healthcare Medical Group, PC, a Tennessee professional corporation; Prompt Care
Medical Center, Inc., a Georgia corporation; Xxxxxxx X. Xxxx; A. Xxxxx Xxxxxxx;
XXXXXX Private Equity and Mezzanine Fund, L.P., a Delaware limited partnership;
and Xxxxxx X. Xxxxxxx, Xx., as amended (the "Acquisition Agreement"), the
parties hereto desire to provide for the issuance in consideration thereof of
Two Million Nine Hundred One Thousand Three Hundred Ninety-Six (2,901,396)
shares of the $0.05 par value voting common stock of UCI to MainStreet (the
"Shares"), pursuant to the terms and conditions set forth in the Acquisition
Agreement and herein.
The parties hereto acknowledge and agree that the prior approval of the
shareholders of UCI (in accordance with applicable Marketplace Rules of the
National Association of Securities Dealers, Inc. and as necessary to amend the
Certificate of Incorporation of UCI) is a condition for the issuance of the
Shares which represent a portion of the consideration to be delivered to
MainStreet for the assets of MainStreet, all as set forth in the Acquisition
Agreement. As a result of the review by the Securities and Exchange Commission
of the Preliminary Proxy Statement of UCI relating to the meeting of the
shareholders of UCI at which such shareholder approval is to be solicited, such
meeting cannot be held prior to the scheduled date of Closing. As a result of
the foregoing, the parties hereto desire to enter into this Agreement whereby
upon satisfaction of the conditions set forth herein UCI shall deliver the
Shares to MainStreet, all upon the terms and conditions set forth herein.
AGREEMENT.
NOW, THEREFORE, in consideration of these premises and the mutual
covenants hereinafter set forth, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Issuance of Shares. Upon satisfaction of the conditions set forth in
Section 2 below, UCI shall tender to MainStreet the Shares as contemplated by
Section 7.1 of the Acquisition Agreement. At such time, UCI shall deliver a
copy of the instructions to the transfer agent of UCI's common stock
instructing the transfer agent to issue certificates evidencing the Shares to
MainStreet and will do all things necessary to cause the issuance of the
Shares and the prompt delivery of the certificates representing the Shares to
MainStreet by the transfer agent. The transfer agent shall be instructed to
deliver a certificate evidencing the HoldBack Shares to Xxxxxx Xxxxx Xxxxxx &
Xxxxxxx, LLP pursuant to Section 13.6.1 of the Acquisition Agreement. The
Shares, when issued, shall be duly
authorized, validly issued, fully paid and non-assessable and not subject to
preemptive rights. The parties hereto acknowledge that the Shares shall be
issued to MainStreet pursuant to an exemption from registration under the
securities laws, such as Rule 506 of SEC Regulation D, and the Shares shall
be restricted shares subject to Rule 144 of the Securities Act of 1933. The
certificates evidencing the Shares shall bear a restrictive legend in
substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER
ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, PLEDGED, TRANSFERRED,
ASSIGNED OR OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE WITH SUCH ACT
AND THE RULES AND REGULATIONS THEREUNDER AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS. THE COMPANY WILL TRANSFER SUCH
SECURITIES ONLY UPON RECEIPT OF EVIDENCE SATISFACTORY TO THE
COMPANY, WHICH MAY INCLUDE AN OPINION OF COUNSEL, THAT THE
REGISTRATION PROVISIONS OF SUCH ACT HAVE BEEN COMPLIED WITH OR THAT
SUCH REGISTRATION IS NOT REQUIRED AND THAT SUCH TRANSFER WILL NOT
VIOLATE ANY APPLICABLE STATE SECURITIES LAWS.
2. Conditions. The obligation of UCI to issue the Shares shall be subject,
to the extent not waived by UCI, to the satisfaction of each of the following
conditions:
a. Approval of Shareholders of UCI. The shareholders of UCI approve
(i) the amendment to UCI's Certificate of Incorporation to increase the number
of authorized shares of the common stock, $0.05 par value, of UCI from
10,000,000 to 30,000,000 shares (the "Charter Amendment"); and (ii) the
issuance of the Shares to MainStreet.
b. Filing of Amendment to Charter. Upon the approval of the Charter
Amendment, UCI shall cause the filing with the Delaware Secretary of State of
the Charter Amendment, which UCI agrees shall be filed no more than three (3)
business days after the approval of such Charter Amendment by the shareholders
of UCI as contemplated in Section 2(A)(i) above.
c. Bringdown of Investment Letters. MainStreet and each of the
security holders of MainStreet (including without limitation the Class A and
Class B shareholders of MainStreet) shall execute and deliver to UCI an
affirmation, in form and substance acceptable to UCI, that each of the
representations and warranties set forth in such entity or person's Investment
Letter, executed and delivered to UCI at Closing pursuant to Section 8.3.8 of
the Acquisition Agreement, is true and accurate in all material respects as of
the date of the issuance of the Shares as set forth in Section 1 above.
3. Registration Rights Agreement. Prior to the issuance of the Shares to
MainStreet, UCI, MainStreet and each of the security holders of MainStreet
(including without limitation the Class A and Class B shareholders of
MainStreet) shall execute and deliver the registration rights agreement
substantially in the form attached as Exhibit 8.4.2 to the Acquisition
Agreement.
4) Failure of Conditions. In the event that as of July 1, 1998 for
any reason any of the conditions set forth in Section 2 (the "Conditions") are
not met, MainStreet shall have the option, exercisable by written notice to
UCI on or before July 8, 1998 to either (i) require UCI to continue to use its
reasonable best efforts to complete the Conditions no later than July 31,
1998, or (ii) unwind the transactions as herein provided (an "Unwind Event").
In the case of an Unwind Event or if the Conditions have not been met by July
31, 1998, the parties to the Acquisition Agreement shall immediately take all
actions in their best efforts to restore the parties to the respective
positions they held prior to the closing of the transactions contemplated in
the Acquisition Agreement. In this connection, without limiting the generality
of the foregoing, each party to the Acquisition Agreement shall (a) undertake
all such actions necessary so that, to the greatest extent reasonably
practicable, all liabilities and assets transferred from any party in the
Acquisition are transferred back to such party, (b) shall execute and deliver
any and all deeds, bills of sale, assignments, assumptions, and other
instruments of conveyance or assumption as shall be reasonably required to
return such liabilities and assets, and (c) perform such other acts as set
forth in the Acquisition Agreement concerning the unwinding of the
transactions contemplated in the Acquisition Agreement. The Transferees will
use commercially reasonable efforts to hold separate and segregate the Assets
until the conditions set forth in Section 2 above are satisfied. In the event
for any reason a party (the Maker") is unable to return to any other party
(the "Holder") any assets (including any cash) or liabilities received by or
from the Holder pursuant to the Acquisition Agreement, the Maker shall
immediately execute and delivery to the Holder a promissory note (the "Note")
in favor of the Holder in an original principal amount equal to, with respect
to any party, the excess, if any, of the amount of the fair market value of
any and all assets which are not returned by such party as set forth above
over the fair market value of any and all liabilities which are not returned
by such party in each case taking into account the terms of the Acquisition
Agreement. Such Note shall bear interest at the then "Prime Rate" as listed in
the Money Rates Section of the Wall Street Journal, and all interest and
principal thereunder shall be due and payable one month after the date of
execution of such Note.
5) Subject to Acquisition Agreement. This Agreement is made,
executed and delivered in connection with the Acquisition Agreement, and is
subject to all the terms, provisions, and conditions thereof. To the extent of
any conflict between the terms hereof and thereof, the terms of the
Acquisition Agreement shall be controlling.
6) Miscellaneous. In the event any provision hereof is held to be
invalid or unenforceable, such invalidity or unenforceability shall not affect
the validity or enforceability of any other provision hereof. This Agreement
contains the entire agreement of the parties hereto with respect to the
subject matter hereof, and no representations, inducements, promises or
agreements, oral or otherwise, not expressly set forth herein shall be of any
force or effect. No amendment to this Agreement shall be binding upon any of
the parties hereto unless said amendment is in writing and signed by the party
against whom enforcement of said amendment is sought. No party hereto shall
assign this Agreement or any interest or obligation herein. All titles or
captions of the paragraphs set forth in this Agreement are inserted only as a
matter of convenience and for reference and in no way define, limit, extend or
describe the scope of this Agreement, or the intent of any provision hereof.
All references to Sections and Exhibits shall mean the Sections and Exhibits
of this Agreement unless otherwise specified. Time is of the essence of this
Agreement. This Agreement shall be governed by and construed in accordance
with the laws of the State of South Carolina. No provision of this Agreement
shall be interpreted against any party because such party or its legal
representative drafted such provision. All rights and remedies of a party
hereunder shall be cumulative and in addition to such rights and remedies as
may be available to a party at law or equity. This Agreement may be executed
simultaneously in several counterparts, each of which shall be deemed an
original but which together shall constitute one and the same original.
IN WITNESS WHEREOF, the parties have executed this Conditional Delivery
Agreement under seal with the corporate parties acting by and through their duly
authorized officers, effective as of the date first above written.
UCI MEDICAL AFFILIATES, INC. MAINSTREET HEALTHCARE CORPORATION
By: /S/ XXXXX XXXXX, XX. By: /S/ XXXXXX X. XXXXXXX, XX.
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Xxxxx X. Xxxxx, Xx. Xxxxxx X. Xxxxxxx, Xx.
Its: Executive Vice President of Finance Its: President
and Chief Financial Officer
UCI MEDICAL AFFILIATES OF
GEORGIA, INC.
By: /S/ XXXXX X. XXXXX, XX.
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Xxxxx X. Xxxxx, Xx.
Its: Executive Vice President of Finance
and Chief Financial Officer
